Animal suppliers stay afloat

Strong sales to academic researchers are helping companies that provide mice, rats, and other model organisms for research weather the global economic crisis, despite a downturn in demand from pharma and biotech.

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At the linkurl:Jackson Laboratory,;http://www.jax.org/ a non-profit mouse supplier in Bar Harbor, Maine, overall demand is down by "single digits," Auro Nair, associate general manager of linkurl:JAX Mice & Services,;http://jaxmice.jax.org/ told __The Scientist__. "But single digits are still significant when you look at the overall situation" for a non-profit that needs to balance its books. The Jackson Laboratory offers thousands of different mouse strains for research purposes. The vast majority of these are specialty strains that only a select few academic investigators request in any given year. "We have not seen any significant volume change on that particular side of our business," Nair said. But the organization also sells around 30 to 40 commonly used strains that are often purchased by biotechnology and pharmaceutical companies, and which are also available from many other commercial suppliers. "With those strains," Nair said, "we see that there's some contraction happening in the market." Many of those same strains are also sold by linkurl:Charles River Laboratories,;http://www.criver.com/ the world's largest animal supplier based in Wilmington, Mass., which similarly experienced a decline in demand. Terrence Fisher, general manager of research models business development, told __The Scientist__ that starting in the second half of last year the company experienced a "notable" sales drop in outbred rats, the basic screening tool used in many therapeutic areas, and in immunodeficient mice, the model of choice for oncology studies. He attributed this slump to pharmaceutical companies looking for shorter term returns and shifting their focus toward later stage clinical development. The company cut 3% of its global workforce in February and last week reported an 11% decline in sales in the first quarter of 2009, compared to the same period last year. Around half of this drop-off came from the research models side of the business (the company also provides pre-clinical testing services), although nearly all those losses could be chalked up to poor foreign currency exchange. The company did experience softer demand from pharmaceutical and biotech clients, though that was offset by a modest increase in academic orders, resulting in overall animal sales holding steady. Pharmaceutical and biotech companies are starting to make more inquiries of late, linkurl:James Foster,;http://ir.criver.com/phoenix.zhtml?c=121668&p=irol-govBio&ID=42215 president and CEO of Charles River, noted at a press conference, but "we're not yet back to the demand we saw last year." Companies that supply non-mammalian research organisms have been far less affected by the global recession, in part because most of their clients are academic researchers but also because smaller organisms are relatively inexpensive. "One of the great things about working with __Drosophila__ is that they're cheap," said Kevin Cook, codirector of the linkurl:Bloomington Drosophila Stock Center;http://flystocks.bio.indiana.edu/ in Indiana, which experienced a 6% increase in demand last year. A typical fly stock costs less than $10, whereas specialty mice often cost more than $100 per individual. "This may be insulating us somewhat from the current economic conditions," said Cook. "You can buy a lot of flies for the cost of a mouse or a monkey." Less than 1% of the stock center's customers are from commercial companies, Cook noted, so it's "too small to say if there's been a change within that category," Clearly, the decline in demand has made the last year difficult for many companies, but most remain optimistic of an upswing in the near future, not least because of a surge of federal funds. "We are hopeful that the NIH stimulus package is going to help," Nair said. "We hope that that translates and we start seeing some of the benefits sooner rather than later." This sentiment is echoed by Fisher. "We're optimistic that we'll start to see some of that [stimulus money] flowing through," he said.
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